American Advance GDP

29-07-2011

Going into Friday’s trading investors cannot be faulted for having concerns about the broad markets. Equities continued to come under pressure on Thursday and this is likely to be the scenario as Wall Street opens in New York. Republican Congressional members were not able to pass their spending bill yesterday even though they had basically hinted it could get done earlier in the day. This leaves today and this weekend with more room to provide further theatre. And investors are not particularly ever in the mood for needless drama. On the other side of the Atlantic debt concerns have not gone away and reports indicate that Ratings Services are focusing on Spain and it ability to fund obligations. There is talk about a possible downgrade coming from Moody’s if Spain is not more forthcoming about its financial standing. The EUR and GBP range traded against the USD on Thursday. The Forex markets are mirroring other aspects of the investment landscape as traders are faced with a shroud of fog and the prospect of poor visibility all day.

Therefore good compasses will be needed. The U.S. does have the Advance GDP numbers on the schedule today for release and the estimated gain is 1.7%. Data from the States has been less than inspiring the past couple of months and investors will be braced for surprises. While some analysts are saying the negativity on Wall Street is overdone based on mere political wrangling which are likely to find some type of proper result, investors actually may be paying little heed to Washington and may be expressing concern about future growth prospects. Thus today’s GDP number will play a key role going into the weekend. The Chicago PMI will also be released today and this will prove interesting because manufacturing sector marks have been rather disappointing for a couple of months. The Chicago PMI today has an expected reading of 60.1.

For other barometric signs on sentiment investors will be able to gear themselves towards the commodity markets. Physicals have seen mixed trading at best the past month and a half as demand has become a worrying factor. Today’s GDP number will play a key role in the price of Crude Oil and the Grains. Gold as of this morning remains in a consolidated position as it is perched slightly off of its record highs with a price around 1614.00 USD per ounce. The AUD has moved away from its highs but is close enough to consider it part of a range. The JPY continues to show strength and is steadfast while it hovers near the strongest parts of its value.

The GBP turned in a fairly tight day of trading on Thursday this as the CBI Realized Sales missed its estimate, but the Nationwide HPI came in positive compared to its negative outlook. The GBP will get some attention today after having gained the past week even as the Bank of England continues to be dovish and its economic prospects do not appear all that glimmering. The Sterling has continued to trade under a shadow of EUR centric sentiment and as of yet has not become too divergent. Thus the GBP may continue to mirror the EUR’s moves against the USD going into the weekend.

The broad markets remains scattered with warning signs for investors as issues continue to perpetuate on both sides of the Atlantic. The global economic outlook remains riddled with hurdles and distress from various corners of the financial world. Officials of the IMF have warned the U.S. that they need to get their Debt Ceiling crisis in order and politicians in the States seem to understand the importance of the problem. However this doesn’t mean that politicians will stop playing with fire as they fight not only about spending cuts but for the stake of their political lives too. Investors would rather not have to watch the merriment coming from the likes of Washington or Brussels and would rather be solely concerned with corporate results based on supply and demand. However, the financial landscape has become heavily influenced by regulations and officials since the crisis of 2008 and it will take at least a few years to change that. But if investors want a pure piece of data to move the market today, the American Advance GDP may provide that – if they are paying attention.

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